The present invention relates to electronic commerce. More specifically, the invention relates to the purchase of travel accommodations, such as hotel rooms, in an electronic exchange transaction.
More and more people are purchasing goods and services electronically, such as over the Internet. These mechanisms provide an outlet for suppliers having surplus inventory, and often allow purchasers to obtain desired goods or services at below-market rates. One common example of an electronic exchange between purchasers and suppliers is the xe2x80x9celectronic travel agent,xe2x80x9d used to place an offer for travel accommodations, such as hotel rooms or airline tickets. However, existing electronic exchanges suffer from various problems. For instance, schemes employed by existing systems to satisfy offers from purchasers with quotes from suppliers do not create an incentive for the suppliers to quote their goods or services at rates significantly below market rates because the suppliers cannot benefit from quoting low rates. One reason is that existing systems satisfy a purchaser""s offer by simply querying a list of suppliers to determine whether one or more of them can provide accommodations at a given rate, based on the offer value. The first qualified supplier that satisfies the offer is selected as the winner of the offer, even if the selected supplier does not quote the lowest rate. There is no incentive for a supplier to quote a lower rate.
In addition, existing schemes charge a purchaser the value of the purchaser""s offer even if that value exceeds what the purchaser would have paid without the aid of the electronic travel service system. In other words, even if the purchaser""s offer exceeds a published rate for the accommodations, existing schemes punish the purchaser by charging her the full value of the offer.
An effective electronic exchange system for satisfying an offer by a purchaser with a quote from a supplier has eluded those skilled in the art.
Briefly stated, the present invention overcomes the problems identified above by providing a system and method that satisfies offers from customers with quotes from suppliers in a way that increases the likelihood of achieving an acceptable match between the offer and a quote. The system of the present invention is configured to receive from a customer an offer for a product. The product may be any commodity available in commerce, such as goods or services. The offer may include specific details to further identify the product being sought. For example, if the offer is for travel accommodations, the offer may identify a travel destination and a price at which the customer is willing to accept accommodations. The offer may additionally identify an area within the destination to more narrowly focus a list of potential suppliers.
The system queries in parallel multiple suppliers for rate quotes on the desired goods or services. Then, rather than selecting the first supplier that satisfies the offer, each of the suppliers are ranked according to the lowest rate quoted by each supplier. The supplier quoting the lowest rate is selected as a preliminary winner with the first right to accept the offer provided that the lowest rate is sufficiently below the offer. At that point, the offer can be matched with the supplier quoting the lowest rate. This system improves over existing electronic exchanges in that the first supplier quoting a satisfactory rate is not necessarily the one selected. Rather, the lowest of multiple potential suppliers is selected. Plus, the consumer may be benefited as well by this incentive to the suppliers to provide at least one low rate.
One improvement to the above-described system is a profit sharing program through which suppliers are not significantly harmed by quoting low rates. In this aspect of the invention, each provider may quote different rates for the same goods or services. For instance, a hotel may return two or more different rates for the same hotel room. The system may select the winning provider in the same manner as above (e.g., by the lowest quoted rate) but then evaluate any other rate quotes provided by the winning provider. The system may satisfy the customer""s offer with the winning provider at a higher rate (if one was provided) than the winning rate quoted, up to the customer""s offer (typically adjusted for a reasonable broker""s profit). In this way, even though the provider provides low rate quotes to win the offer, the provider may still realize a much higher rate for the goods or services by quoting additional, higher rate quotes as well. Yet another improvement to the above-described system is an upgrade reward system through which customers are incentivized to provide higher offers for the goods or services. In this aspect of the invention, the offer provided by the customer identifies a minimum quality rating, such as a star rating for a hotel, that the customer is willing to accept. The queries made to potential providers may additionally request the rating of the goods or services being quoted. In this way, the system may rank the potential providers by both rate quotes and ratings. Then the system may identify as the offer winner the potential provider quoting the highest rating that at least satisfies the customer""s offer, and that has the lowest quoted rate. In this way, if a provider quotes a rate that satisfies the customer""s offer price and that has a higher rating than acceptable by the customer, the customer is rewarded with better-than-acceptable goods or services at the same price. Optionally, the system may calculate a value, based on the offer value, below which the rate quote must be before upgrading the customer, thereby creating a disincentive for the customer to offer extremely low. For example, the system may adjust the offer value by some factor or a percentage and only upgrade for rate quotes below the adjusted value.
These and other aspects of the invention, together with the benefits and advantages realized, will become apparent from a reading of the following detailed description in conjunction with the drawings, in which: